FOREX-Dollar edges higher ahead of Powell testimony in busy week

Reuters Staff

6 Min Read

* Powell testimony, central banker speeches keep markets
edgy
* Traders brace for German, Italian political developments
(Recasts, adds analyst comment, FX table, updates prices,
changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 26 (Reuters) - The dollar inched higher on
Monday in choppy trading ahead of a slew of U.S. economic data
and events this week, including Federal Reserve Chairman Jerome
Powell's testimony, which could determine whether the
greenback's recovery from a three-year low can be sustained.
The prospect of further interest rate increases by the
Federal Reserve, more than what the market has initially priced
in, has bolstered the dollar in the last few weeks.
Concerns about rising inflation after a prolonged period of
stagnant price gains have raised the possibility that the Fed
could tighten more than expected this year and the next, an
expectation that has boosted Treasury yields and lifted the
dollar.
Since the dollar index hit a three-year trough more than a
week ago, the U.S. currency has risen 1.4 percent and is
tracking nearly 1.0 percent in gains for the month of February,
after losses of more than 3 percent in January.
The focus this week is Powell's first congressional
testimony. Powell will testify on the central bank's semiannual
report on monetary policy and the economy on Tuesday before the
U.S. House of Representatives’ Financial Services Committee.
Investors will be scanning Powell's comments for any signs
that the central bank wants to raise rates faster to address
inflationary pressures.
"If Powell suggests that the Federal Reserve could raise
U.S. interest rates four times in 2018, it could be seen as a
positive sign for the U.S. dollar," said Jameel Ahmad, global
head of currency strategy and market research at online
brokerage FXTM.
The dollar index was up 0.1 percent at 89.964.
This week is also loaded with major U.S. data on consumer
confidence, revised fourth-quarter growth, manufacturing and
personal income and spending.
Analysts also said investors were cautious about taking big
positions this week due to political events in Europe.
Italians vote in a national election on Sunday, while the
leading political parties in Germany will decide on a coalition
deal that could secure Angela Merkel a fourth term as
chancellor.
Euro zone inflation data due later this week further added
to a nervous outlook for euro trading.
European Central Bank President Mario Draghi spoke before
the European Parliament on Monday and struck an optimistic tone
about the euro zone economy. He said, however, that inflation
has yet to show more convincing signs of a sustained upward
adjustment.
In late morning trading, the euro was little changed against
the dollar at $1.2292.
The dollar was also flat versus the yen at 106.90 yen
.
========================================================
Currency bid prices at 10:35AM (1535 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.2288 $1.2293 -0.04% +0.00% +1.2354 +1.2281
Dollar/Yen JPY= 106.8900 106.8800 +0.01% +0.00% +107.2800 +106.3800
Euro/Yen EURJPY= 131.35 131.39 -0.03% +0.00% +131.8500 +131.0900
Dollar/Swiss CHF= 0.9388 0.9366 +0.23% +0.00% +0.9388 +0.9326
Sterling/Dollar GBP= 1.3942 1.3965 -0.16% +0.00% +1.4069 +1.3939
Dollar/Canadian CAD= 1.2705 1.2628 +0.61% +0.00% +1.2708 +1.2616
Australian/Doll AUD= 0.7827 0.7842 -0.19% +0.00% +0.7893 +0.7829
ar
Euro/Swiss EURCHF= 1.1536 1.1515 +0.18% +0.00% +1.1543 +1.1497
Euro/Sterling EURGBP= 0.8811 0.8799 +0.14% +0.00% +0.8819 +0.8772
NZ NZD= 0.7297 0.7288 +0.12% +0.00% +0.7345 +0.7278
Dollar/Dollar
Dollar/Norway NOK= 7.8324 7.8450 -0.16% +0.00% +7.8571 +7.7924
Euro/Norway EURNOK= 9.6249 9.6460 -0.22% +0.00% +9.6568 +9.6172
Dollar/Sweden SEK= 8.1727 8.1729 -0.06% +0.00% +8.1848 +8.1262
Euro/Sweden EURSEK= 10.0429 10.0490 -0.06% +0.00% +10.0565 +10.0198
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Tommy Wilkes in London; Editing by Jonathan Oatis)